Bargaining over Contingent Contracts Under Incomplete Information

Geoffroy de Clippel, Jack Fanning and Kareen Rozen

No 2020-13, Working Papers from Brown University, Department of Economics

Abstract: We study bargaining over contingent contracts in problems where private information becomes public or verifiable when the time comes to implement the agreement. We suggest a simple, two-stage game that incorporates important aspects of bargaining. We characterize equilibria in which parties always reach agreement, and study their limits as bargaining frictions vanish. We show that under mild regularity conditions, all interim-efficient limits belong to Myerson (1984)ís axiomatic solution. Furthermore, all limits must be interim-efficient if equilibria are required to be sequential. Results extend to other bargaining protocols.

Date: 2020
New Economics Papers: this item is included in nep-cta, nep-des, nep-gth, nep-mic and nep-reg
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Journal Article: Bargaining over Contingent Contracts under Incomplete Information (2022)
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Persistent link: https://EconPapers.repec.org/RePEc:bro:econwp:2020-13

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